CHARLES DAVIS v. BANK OF AMERICA, N. A.

DISTRICT COURT OF APPEAL OF FLORIDA
SECOND DISTRICT
CHARLES DAVIS,
Appellant,
v.
BANK OF AMERICA, N.A.;
PNC BANK NATIONAL ASSOCIATION; and
C&K INVESTMENT LLC d/b/a CITY LIMIT AUTO SALES,
Appellees.
No. 2D21-2795
September 30, 2022
Appeal pursuant to Fla. R. App. P. 9.130 from the Circuit Court for
Hillsborough County; Emily A. Peacock, Judge.
Aldo Bollinger of Bollinger Law Group, PLLC, St. Petersburg, for
Appellant.
Tricia J. Duthiers of Liebler, Gonzalez & Portuondo, Miami, for
Appellee Bank of America, N.A.
No appearance for remaining Appellees.
SILBERMAN, Judge.
Charles Davis appeals the trial court's order denying his
motion to dismiss Bank of America's (BOA) Counterclaim/Third-
Party Complaint with prejudice or his alternative motion to compel
arbitration and motion to transfer venue. Because the trial court
erred in denying Davis's motion to compel arbitration, we reverse
and remand for entry of an order granting that motion. We affirm
the remainder of the trial court's order as it pertains to Davis.
I. FACTUAL BACKGROUND
Davis was the sole member, manager, and registered agent of
C&K Investment, LLC d/b/a City Limit Auto Sales (C&K). Davis
opened a business checking account with BOA on behalf of C&K.
He signed a signature card for the account as C&K's manager,
acknowledging and agreeing that the account is governed by
various documents, including a deposit agreement. By its terms,
the agreement is binding on BOA, C&K as the account owner, and
on all persons "with authority to withdraw funds from the account
or otherwise operate the account." The record reflects that Davis
had such authority. The deposit agreement also contains
provisions addressing arbitration, jurisdiction and venue, and
liability.
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The jurisdiction and venue provision states the following:
Any action or proceeding regarding your account or this
deposit agreement must be brought in the state in which
the financial center that maintains your account is
located. You submit to the personal jurisdiction of that
state. . . . If a Claim is submitted to arbitration and the
state where that financial center is located is not
reasonably convenient for you, then you and we will
attempt to agree on another location. If you and we are
unable to agree on another location, then the location
will be determined by the Administrator or arbitrator.
Except for certain limitations concerning class actions and jury trial
waivers, the agreement provides that either party may compel
binding arbitration.
In March 2017 Davis deposited a $30,000 check payable to
C&K into C&K's account at BOA. The following day he obtained a
$20,000 cashier's check from the C&K account payable to himself.
The very next day BOA entered a "return item chargeback" on the
C&K account as the $30,000 check did not clear. This resulted in
an overdraft of C&K's account due to insufficient funds. The record
reflects that BOA sent multiple statements to C&K reflecting that
the account had a negative balance of $20,422.45. In July 2017
BOA "force closed" C&K's overdrawn account.
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As alleged in Davis's second amended complaint against PNC
Bank, in September 2018 he deposited the $20,000 cashier's check
into his personal PNC account. Although the cashier's check
indicated on its face that it was void after 90 days from its issuance
in March 2017, BOA honored the check and transferred the funds
into Davis's PNC account. Davis asserted that PNC refused to
release the funds to Davis and froze his account without
explanation.
Based on allegations contained in the pleadings, at some point
PNC and BOA entered into an indemnification agreement and PNC
returned the cashier's check to BOA.1
II. PROCEDURAL BACKGROUND
Davis sued PNC for breach of contract and civil theft based on
its freezing of his account and its failure to release to him the funds
from the cashier's check. PNC then sued BOA as a third-party
defendant pursuant to the indemnification agreement.
BOA filed affirmative defenses directed to PNC's third-party
complaint and a Counterclaim/Third-Party Complaint against Davis
1Our record does not contain a copy of the indemnification
agreement.
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and C&K. The Counterclaim/Third-Party Complaint sought a
declaratory judgment against Davis and C&K with respect to the
parties' rights and obligations concerning the $20,000 cashier's
check.
In response to BOA's Counterclaim/Third-Party Complaint,
Davis filed a motion to dismiss with prejudice or in the alternative a
motion to compel arbitration and motion to transfer venue of the
Counterclaim/Third-Party Complaint. The trial court denied
Davis's motions.
Davis has raised multiple issues on appeal, including that the
trial court erred in denying his challenge to venue and in refusing to
enforce the arbitration provision contained in the deposit
agreement. We address these two issues but reject without
discussion Davis's other issues. We also address an argument
made by BOA regarding service of process on C&K.
III. VENUE
On appeal, review of a contractual provision as to venue is de
novo where there are no factual issues to be resolved. See Se.
Concrete Constructors, LLC v. W. Sur. Co., 331 So. 3d 763, 765 (Fla.
2d DCA 2021); Am. Boxing & Athletic Ass'n v. Young, 911 So. 2d
5
862, 864 (Fla. 2d DCA 2005). Where the trial court must resolve
factual issues relating to venue, we determine whether the trial
court's factual findings are supported by competent substantial
evidence or are clearly erroneous; we review de novo the trial court's
legal conclusions. See Breed Techs., Inc. v. AlliedSignal Inc., 861
So. 2d 1227, 1230 (Fla. 2d DCA 2003); Wynn Drywall, Inc. v.
Aequicap Program Adm'rs, Inc., 953 So. 2d 28, 30 (Fla. 4th DCA
2007).
Davis argues that as to BOA's Counterclaim/Third-Party
Complaint against him, venue is not proper in Hillsborough County
but instead would be proper in Missouri. He asserts that the BOA
account was established in Missouri and that C&K was a Missouri
entity that has been dissolved. However, the deposit agreement
provides that any action as to the account or the deposit agreement
"must be brought in the state in which the financial center that
maintains your account is located."
Davis did not establish that the BOA financial center that
maintained the C&K account was located outside of Hillsborough
County at the time of the events giving rise to this litigation. In
fact, the account statements contained in our record list a Tampa
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address for BOA in the section titled "Customer service
information."
Further, Davis is a Hillsborough County resident and initiated
his lawsuit against PNC in Hillsborough County to enforce his
rights to the funds represented by "a Cashier's Check issued by
Bank of America, guaranteed by Bank of America, drawn on Bank
of America's own funds and signed by a cashier guaranteeing the
funds in the amount of $20,000." Under Florida Rule of Civil
Procedure 1.180(a), a third-party defendant such as BOA may
assert against a plaintiff such as Davis "any defenses that the
defendant has to the plaintiff's claim. The third-party defendant
may also assert any claim against the plaintiff arising out of the
transaction or occurrence that is the subject matter of the plaintiff's
claim against the defendant."
Davis's claim against PNC arises from the cashier' check he
obtained from BOA and deposited into his PNC account and from
PNC's handling of that check. PNC's claim for indemnification
against BOA arises from the same cashier's check and the
indemnification agreement between PNC and BOA. And BOA's
claim against Davis arises from the circumstances surrounding
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Davis's purchase of the cashier's check, his later deposit of that
check with PNC, and his claim for the funds represented by that
check.
In light of the circumstances, we conclude that Davis has not
established error in the trial court's denial of his challenge to venue
in Hillsborough County.
IV. ARBITRATION
We review the denial of a request to compel arbitration de
novo. Stacy David, Inc. v. Consuegra, 845 So. 2d 303, 306 (Fla. 2d
DCA 2003). "Courts generally favor [arbitration] provisions, and will
try to resolve an ambiguity in an arbitration provision in favor of
arbitration." Jackson v. Shakespeare Found., Inc., 108 So. 3d 587,
593 (Fla. 2013). Because "[a]rbitration provisions are contractual in
nature[,] . . . [t]he intent of the parties to a contract, as manifested
in the plain language of the arbitration provision and contract itself,
determines whether a dispute is subject to arbitration." Id. (citing
Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla. 1999)).
Both federal statutory provisions and the Florida arbitration
code require courts to consider three elements when ruling on a
motion to compel arbitration: "(1) whether a valid written agreement
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to arbitrate exists; (2) whether an arbitrable issue exists; and (3)
whether the right to arbitration was waived." Shotts v. OP Winter
Haven, Inc., 86 So. 3d 456, 464 (Fla. 2011) (quoting Seifert, 750 So.
2d at 636).
As to the first element, it is "for the court, not the arbitrator, to
determine 'whether a valid written agreement to arbitrate exists.' "
Id. at 471 (quoting Seifert, 750 So. 2d at 636). An arbitration
agreement is not valid and will be unenforceable if it violates public
policy. See id. (citing Glob. Travel Mktg., Inc. v. Shea, 908 So. 2d
392, 398 (Fla. 2005)).
Davis contends that he is not individually bound by the
deposit agreement because he signed the account signature card on
behalf of C&K. In the alternative, he asserts that if he is bound by
the agreement, then he is entitled to compel arbitration of BOA's
claims under that agreement. He does not otherwise challenge the
validity and enforceability of the arbitration provision. While BOA
maintains that Davis is bound by the deposit agreement, it argues
unpersuasively that arbitration of the claims should not be
compelled and should be resolved in court based on equity.
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Based on the terms of the deposit agreement and the record
before us, we agree with BOA that the deposit agreement is binding
on Davis as a person with authority to withdraw funds from the
account and to operate the account. Simply put, Davis has not
established anything to the contrary.
As to the second element, a court must consider whether an
arbitrable issue exists. See Shotts, 86 So. 3d at 464 (citing Seifert,
750 So. 2d at 636). "Determining whether an arbitrable issue exists
requires the court to examine the plain language of the parties'
arbitration agreement." Bailey v. Women's Pelvic Health, LLC, 309
So. 3d 698, 701 (Fla. 1st DCA 2020) (citing Lake City Fire & Rescue
Ass'n, Local 2288 v. City of Lake City, 240 So. 3d 128, 130 (Fla. 1st
DCA 2018)). Further, "[c]ontracts with arbitration clauses create a
presumption of arbitrability." Id. (quoting Robertson Grp., P.A. v.
Robertson, 67 So. 3d 1112, 1114 (Fla. 1st DCA 2011)).
In its Counterclaim/Third-Party Complaint BOA asserts that
pursuant to the deposit agreement Davis "is personally responsible
for overdrafts, fees, and other debts associated" with C&K's
account. It seeks a declaration of the parties' rights, a declaration
that Davis's claims against PNC are null and void, and a judgment
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in its favor including attorney's fees, court costs, and such other
relief as is "just and proper."
The provisions of the deposit agreement dealing with resolving
claims and arbitration specify that they apply to "any claim, dispute
or controversy (whether under a statute, in contract, tort, or
otherwise and whether for money damages, penalties or declaratory
or equitable relief)" made by either party against the other, "arising
from or relating in any way to this deposit agreement . . . or the
deposit relationship between us." Based on the nature of BOA's
claim and the terms of the deposit agreement, an arbitrable issue
exists.
As to the third element, courts must determine whether the
right to arbitrate has been waived. See Shotts, 86 So. 3d at 464
(citing Seifert, 750 So. 2d at 636). "The right to arbitration, like any
contract right, can be waived." Raymond James Fin. Servs., Inc. v.
Saldukas, 896 So. 2d 707, 711 (Fla. 2005) (quoting Nat'l Found. for
Cancer Rsch. v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 774 (D.C.
Cir. 1987)). The Florida Supreme Court has "defined 'waiver' as the
voluntary and intentional relinquishment of a known right or
conduct which implies the voluntary and intentional
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relinquishment of a known right." Id. "[A] party may waive his or
her right to arbitration by filing a lawsuit without seeking
arbitration, by filing an answer to a pleading seeking affirmative
relief without raising the right to arbitration, and by moving for
summary judgment." Green Tree Servicing, LLC v. McLeod, 15 So.
3d 682, 687 (Fla. 2d DCA 2009) (internal citations omitted).
Nothing here suggests that Davis waived any right to compel
arbitration. He did not file suit against BOA; rather, he filed suit
against PNC based on its handling of the cashier's check he had
deposited. PNC then brought a claim against BOA, leading BOA to
file its Counterclaim/Third-Party Complaint against Davis and
C&K. Davis then responded with his motion to dismiss and
alternative motion to compel arbitration and to transfer venue.
Because BOA has not established that Davis waived the right to
compel arbitration, we reverse the trial court's order denying
Davis's motion to compel arbitration.
V. BOA'S ARGUMENTS AS TO SERVICE OF PROCESS
ON C&K
BOA argues that the trial court's order should be affirmed as
to both Davis and C&K. However, BOA glosses over a crucial
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procedural problem regarding C&K. In its Counterclaim/Third-
Party Complaint BOA added C&K as a named party to the litigation.
However, it did not provide formal service of process of that
pleading to C&K. See § 48.062, Fla. Stat. (2021) (providing
acceptable methods of service of process on a limited liability
company). Instead, it appears BOA provided a copy of its
Counterclaim/Third-Party Complaint to Davis's personal counsel
through the Florida Courts E-filing Portal.
As noted previously, Davis responded to BOA's pleading by
filing, on his own behalf, a motion to dismiss and alternative
motions to compel arbitration and to transfer venue. Davis pointed
out that BOA had added C&K as a party to the litigation but had
not served C&K with process.
C&K did not respond to BOA's Counterclaim/Third-Party
Complaint and did not make an appearance in the trial court or in
this appeal. In its order denying Davis's motion and alternative
motions, and despite the lack of service or any appearance in the
case by C&K, the trial court directed both Davis and C&K to file
answers to BOA's pleading.
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BOA, through its appellate counsel, has argued to this court
that C&K was provided with proper service because: 1) Davis is the
sole member, manager, and registered agent of C&K; 2) BOA's
Counterclaim/Third-Party Complaint was provided to Davis's
counsel; 3) Davis's responsive motion "raised substantive
arguments on behalf of C&K"; and 4) Davis waived service of
process on C&K by raising those substantive arguments.
We are puzzled and troubled by counsel's argument that
simply providing a copy of BOA's pleading to Davis's lawyer,
apparently through the Florida Court's E-Filing Portal, constitutes
service of process on C&K. This argument and the others described
above were made without citation to any legal authority that
actually supports those arguments.
Counsel quotes from section 48.062 dealing with service of
process on limited liability companies. However, counsel ignores
the requirements of that statute in arguing that providing a copy of
BOA's pleading to Davis's counsel constitutes formal service of
process. The cases that counsel cites involve significantly different
circumstances and are inapposite. Indeed, counsel cites to cases
regarding waiver when a defending party agrees to accept service of
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process by mail, yet counsel fails to acknowledge that nothing in
this record reflects that C&K, Davis, or Davis's counsel agreed to
accept service on C&K by copy of BOA's pleading to Davis's counsel.
We are further troubled by counsel's argument that Davis's
motions made in response to BOA's pleading were also made on
behalf of C&K and constitute a waiver of service. It is clear from
those motions that they were filed only on Davis's behalf.
We make these observations due to the lack of legal authority
or record support identified in BOA's brief and during oral
argument for the above-described contentions. However, because
C&K has not been served in this litigation and has not appeared in
this appeal, we do not address further that portion of the trial
court's order directing C&K to respond to BOA's
Counterclaim/Third-Party Complaint.
VI. CONCLUSION
We affirm the trial court's order to the extent that it denied
Davis's motion to dismiss BOA's claim and his motion to transfer
venue. We reverse the trial court's order to the extent that it denied
Davis's motion to compel arbitration, and we remand for the trial
court to enter an order compelling arbitration in accordance with
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the deposit agreement. See Yam Exp. & Imp. LLC v. Nicaragua
Tobacco Imps., Inc., 298 So. 3d 1173, 1175 (Fla. 3d DCA 2020).
Affirmed in part; reversed in part; and remanded.
CASANUEVA and SMITH, JJ., Concur.
Opinion subject to revision prior to official publication.
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